NEW YORK - Viacom Inc., the owner of MTV Networks and the Paramount Pictures film studio, said third-quarter profit rose 15 percent, more than analysts estimated, on higher box office revenue and an easing advertising slump.
Net income increased to $463 million, or 76 cents a share, from $401 million, or 65 cents, a year ago, the New York-based company said yesterday. Excluding tax benefits and costs to refinance debt, profit of 69 cents a share topped the 57-cent average of 22 analysts’ estimates compiled by Bloomberg.
Box office sales for “G.I. Joe: The Rise of Cobra’’ and “Transformers: Revenge of the Fallen’’ helped drive movie profit, along with expense and job cuts, even as DVD sales continued to drop. Chief executive Philippe Dauman also helped offset lower television ad sales with higher affiliate fees paid by cable providers.
“The studio has some genuine hits on their hands,’’ Chris Marangi, an analyst with Gabelli & Co. in Rye, New York, said. “The margins came in much better than expected. They’ve taken a lot of costs out.’’
Revenue dropped 2.7 percent to $3.32 billion on falling advertising and DVD sales. Analysts predicted revenue of $3.29 billion, the average of 17 estimates compiled by Bloomberg.
“By keeping a sharp eye on costs while continuing to invest in programming, Viacom is in a strong position to benefit as the economic clouds begin to part,’’ Redstone said on a conference call.
US ad sales fell 4 percent at the cable networks, including VH1 and Comedy Central, after declining 6 percent in the second quarter and 9 percent in the first. The drop was in line with an estimate from Michael Morris, a UBS AG analyst in New York.
It’s too early to predict how advertising sales will fare this quarter, Dauman said on the conference call.
Operating profit at the networks, also including Nickelodeon, MTV, and BET, gained 1.6 percent to $773 million. Revenue was little changed at $2.12 billion. Worldwide affiliate fees increased 10 percent.
